Business, 12.03.2020 20:18 quanharris2k19

Assume that interest rate parity does not hold, and Japanese investors are benefiting from covered interest arbitrage due to high interest rates in the U. S.
Which of the following forces should result from this covered interest arbitrage activity?

A) downward pressure on the euro's spot rate
B) downward pressure on the euro's forward rate
C) downward pressure on the U. S. interest rate
D) upward pressure on the euro's interest rate

Answers: 1

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